Download the Lessonotes Mobile Liberia app for faster lesson access on Android and iPhone.
Subject: Economics
Semester: 2
Period: 5
Week: 28
School Name:
Teacher’s Name:
Subject: Economics
Grade Level: Grade 12
Week & Period: Week 28, Period V
Date:
Topic: Public Finance and International Organizations
Sub-topic: Tax Incidence and the Role of Elasticity of Demand/Supply
Instructional Objectives
By the end of this lesson, learners should be able to:
- Explain the concept of tax incidence.
- Illustrate how elasticity of demand and supply affect who bears the burden of a tax.
- Use simple graphs to show tax burden on producers and consumers.
Instructional Materials
- Graphs and charts
- Case study scenarios
- Marker and whiteboard
- Ruler for drawing demand and supply diagrams
Previous Knowledge
Learners have already studied types of taxes and their advantages and disadvantages.
A – Anticipation (Engagement/Warm-Up)
Motivational Set (5 minutes) Ask:
“When government imposes a tax on soft drinks, who do you think suffers more — the buyer or the seller?” Use responses to introduce the topic of tax incidence and the concept of elasticity.
B – Building Knowledge (Development)
Teacher’s Explanation (20 minutes)
Tax Incidence:
- Refers to how the burden of a tax is shared between buyers and sellers.
Elasticity and Tax Burden:
- If demand is inelastic (e.g., medicine), consumers bear more tax.
- If supply is inelastic (e.g., farmland), producers bear more tax.
- Elastic demand/supply leads to shared burden or a shift away from taxed goods.
Graphical Illustration:
- Draw supply and demand curves.
- Show shifts when a tax is introduced.
- Identify areas where burden is on consumers or producers.
Class Activity (10 minutes)
In groups, give students a real-life scenario (e.g., tax on rice). Each group draws a demand-supply diagram and explains who bears more tax and why, based on elasticity.
C – Consolidation (Wrap-Up and Evaluation)
Teacher Summary (3 minutes) Summarize how elasticity affects tax incidence and reinforce the importance of considering tax impact when forming policies.
Assessment (7 minutes)
Multiple Choice:
- Tax incidence refers to: A. The rate of tax
The number of taxpayers
C. The sharing of tax burden
D. Only government revenue - When demand is inelastic, tax burden falls mostly on: A. The government
The seller
C. The buyer
D. The bank
Short Answer: 3. Define tax incidence. 4. Explain what happens when demand is elastic and a tax is introduced.
Assignment
Draw a demand and supply diagram for a commodity with inelastic demand and show how a tax increases the price paid by consumers. Label all parts clearly.
Teacher’s Reflection (Questions Only)
- Did learners understand the connection between elasticity and tax burden?
- Could they interpret and draw accurate demand-supply graphs?
- Did the group activity help them apply theory to practical scenarios?
- Were learners actively involved and engaged?
- Should more time be allocated for diagram explanations in future lessons?